NA body discusses new policy regime of SECP for stock brokers
ISLAMABAD: National Assembly (NA) Standing Committee on Finance, Revenue and Economic Affairs discussed about the new policy regime introduced by Security Exchange Commission of Pakistan (SECP), regarding stock brokers and broker houses.
The meeting of Standing Committee on Finance, Revenue and Economic Affairs of the National Assembly was held under the chairmanship of MNA Faiz Ullah, here in Parliament House.
The committee also decided to defer the agenda pertaining to budgetary proposals of the Ministry of Finance, Revenue and Economic Affairs relating to Public Sector Development Programme (PSDP) for the financial year 2020-21, as required under rule 201(6) of the Rules of Procedure and Conduct of Business in the National Assembly 2007, due to time shortage.
The Commissioner, SECP briefed the Committee about the salient features of new policy, wherein he explained the measure taken for the improvement of stock market by the government.
He said that new regime will be based on categorization of brokers into three categories including, Trading and Clearing, Trading and Self-Clearing (TSC) and trading Only (TO), and SC categories permitted to retain custody of client assets.
Whereas TO broker to only keep custody of its proprietary book, directors and sponsors and their close relatives, Migration to an effective risk-based compliance culture, he informed.
The Committee said that new regime was also based on the regulatory framework implemented in 2016.
The Chairman, Security Exchange Commission of Pakistan informed that proper consultation in that regard has already been made by the SECP with number of stakeholders (Stock Brokers) for last ten months.
He also explained the objectives of the new regime, increased in number of brokers, improvement of governance and internal controls, compliance with AML/CFT requirements, ease of doing business and commercial viability of brokers and to enabling the small investors to concentrate on their core competence etc.
President, Pakistan Stock Exchange, Broker House Karachi and few other stakeholders expressed their concerns over the design of new regime.
They were of the stance that said SRO (New Regime) will affect the small stock exchange brokers and it will further create monopoly of gigantic brokers.
Some members of the Committee were of the view that subject regulations will provide protection to investors.
After threadbare discussion, the Committee recommended that Security Exchange Commission of Pakistan should review its policy with the consultations of stakeholders and will submit its report to the Committee in 15 days. – APP